REFINERIA SAN LORENZO, S.A.

completed

- 1 - January 3, 1996Environmental Review Summary (ERS)Project Name: Argentina:RefisanRegion: LACSector: PetrochemicalProject No.: 0051371. Refineria San Lorenzo S.A. (Refisan) is owned by a group of Argentine companies, and controlled by Perez Companc. Refisan was established to take over the ownership and operation of the former YPF owned refinery in San Lorenzo, when it was privatized in early 1993. The proposed project involves the consolidation of Refisan’s existing refinery to expand its capacity from 32,000 bpd to 42,000 bpd and the expansion of its distribution network to about 70 gas stations in its regional market. The project will further support Refisan’s ongoing effort to remediate site contamination resulting from the relaxed operation practices before the privatization.2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of review of an environmental audit and environmental reports prepared by Refisan consultants after the take over and by site inspections by Technical and Environmental Department staff. The following potential environmental, health and safety impacts were analyzed: . site contamination from past operations; . clean up programs and progress of programs; . air emissions; .liquid effluent treatment; .solid waste management; .fire protection and emergency response; and .occupational health and safety policies.Information provided on how these potential impacts are addressed in the Refisan project is summarized in the paragraphs that follow.3. When Refisan took over the operation of the San Lorenzo refinery in April 1993, severe site contamination and ground water contamination was found. A study, carried out in connection with the take over, described the following: (i) upper layer soil contamination at the oil terminal by the River and at the refinery area, and (ii) potential leakages from underground pipes at the refinery and from a multi-product underground pipeline between the refinery and the terminal. Further, a free phase of hydrocarbons was found in the upper layer of the first aquifer.4. Since the take over, the company has repaired all potential leaking facilities, and are well under way in replacing underground piping with above ground piping. The only major pending activities are repair of the unloading area for rail tankers at the refinery site and replacement of the transmission pipelines between the refinery and the terminal. The unloading area for rail tankers at the refinery site will be cleaned up and repaired during 1996, when the repair of a similar area at the terminal site will have been completed. The replacement of the transmission pipeline is ready to go ahead, but is awaiting the construction approval from the local authorities. This approval is expected late January 1996 and the construction and potential clean up work will then proceed immediately there after.5. Contaminated soil has been removed from the refinery and terminal areas and is being decontaminated by bio-degradation in a landfarming operation on site.6. A hydro-geological study was carried out in 1994 to define the extent of the aquifer pollution and methods for decontamination. The company has followed the recommendations from the report and has, as of December 1995, removed approximately 5,000 tons of the expected 10,000 tons to be found. The removal of free oils will continue for a further one to two years and will be followed by a final decontamination phase.7. Air emissions from the refinery are limited. The refinery receives low sulfur oil (average sulfur content 0.5 %), and has recently started introducing low NOxburners. All air emissions are well within local requirements and World Bank guidelines.8. Liquid effluents are treated in API separators at the refinery and at the terminal. The separators have been repaired and upgraded to comply with local requirements and World Bank guidelines for removal of hydrocarbons. The company is working on a further upgrade to prepare for meeting future stringent limits. Installation of a closed cooling water system, as part of the project, will reduce the intake and discharge of river water, and suspended solids will be reduced to 30 mg/liter. The river used for cooling water intake and discharge has a suspended solid concentration of more than 100 mg/liter.9. Solid wastes consist of domestic waste and oily sludge. Domestic waste is disposed of by the municipal system and oily sludge is decontaminated in the landfarming operation. The landfarming operation is functional and has shown bio-degradation by end 1995. The landfarming operation will, as part of the project, be upgraded to improve bio-degradation rate and hereby raise the treatment capacity.10. Refisan has its own fire brigade with fire engines and support trailers. The fire brigade participates in a regional emergency response program including major industries in the region. If needed, Refisan can get support from other fire brigades participating in the regional emergency response program. The refinery and the terminal are equipped with fire water reservoirs, ring mains, fixed fire fighting equipment and strategically located connection points for fire water out take.11. Refisan is giving extensive health and safety training to employees. The refinery has, as of December 1995, operated for more than one year without any lost day accident.12. IFC will ensure ongoing compliance with World Bank environmental, health and safety policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by Refisan, and by conducting periodic supervision.13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Refisan’s proposed project will meet World Bank environmental, health and safety policies and guidelines, and host country requirements.L:\CPFD1\ARGENTIN\RSL\REFINSAN.ERSJanuary 11, 1996 10:28 AM